Worcester loan for brewery may be pulled

Sunday

Jan 6, 2013 at 6:00 AMJan 6, 2013 at 6:21 AM

By Nick Kotsopoulos TELEGRAM & GAZETTE STAFF

City Manager Michael V. O'Brien is asking the City Council to rescind a $400,000 loan order it approved in October to facilitate the relocation of Wormtown Brewing Co.'s beer manufacturing operations to Union Station.

But the action does not mean the project is doomed.

Mr. O'Brien said the Worcester Redevelopment Authority and Wormtown Brewery have created a framework for moving forward whereby the WRA will accomplish and finance the infrastructure improvements to the space the brewery wants to occupy in Union Station, while the company will undertake all equipment and operations-related expenses.

“This is an important step forward for the project,” he said.

“The city, through the WRA, continues its discussions with Wormtown to ensure that all public dollars at Union Station are spent appropriately and that any public investment is protected.”

Mr. O'Brien said the WRA, which owns Union Station, expects to finalize a lease with Wormtown Brewery in the coming weeks so the relocation project can move forward. Wormtown Brewery, currently located at 455B Park Ave., adjacent to Peppercorn's Grille and Tavern, opened in March 2010. It operates in a 1,200-square-foot site in what was once an ice cream parlor next to Peppercorn's.

But owner Thomas Oliveri said the business has outgrown its current location, and as a result, has been working with the WRA to relocate the brewery's manufacturing operations to the historic train station at Washington Square.

The company is interested in occupying roughly 7,500 square feet on the first floor of Union Station, on the Harding Street side of the station where loading docks are located. That part of Union Station is considered ideal for its operations because of its high ceilings and access to the loading docks. The space extends from the building's Harding Street entrance to its rotunda in the middle of the station.

Wormtown Brewery initially intends to just have its manufacturing operation at Union Station. City officials have said there are no plans for it to have a restaurant component or something more for at least the first couple of years. To facilitate the relocation, the City Council approved a $400,000 loan order in October to fund the purchase of equipment and fitting out the tenant space.

The financing of the tenant fit-out and equipment was to be incorporated as part of Wormtown's lease agreement with the WRA.

But things hit a snag in November when it was revealed the brewery equipment the WRA was considering buying and then leasing to Wormtown Brewery would cost at least $438,690 — far exceeding the entire loan order for tenant fit-out and equipment purchases and other operational expenses.

The price tag for the brewing equipment didn't cover everything else needed to facilitate Wormtown Brewery's relocation because the city only got bids on two of five parts of its bid package.

The city and Wormtown Brewery had looked at several other sites throughout the city for relocating the brewing operations, including the vacant ground level retail spaces at the Union Station garage.

But city officials said the Oliveri family felt the space in Union Station would suit its needs best. Mr. Oliveri has said the 7,500-square-foot Union Station space would allow him to boost production and hire a few additional brewers right away.

The city manager's recommendation goes before the City Council Tuesday night.